Whilst many independent schools have shared worries around the impact that a VAT-introduction will have, this has also opened up the door for schools to scrutinise how they currently run operationally and understand where efficiencies can be made.
Two key school budget spends tend to fall under ‘catering’ or ‘FM’. Whether this spend is on an in-house or contracted catering/FM provision, let’s take a look at what you can do today to drive cost-savings in these two areas…
Tackling the potential upcoming VAT introduction on school fees.
How to use this opportunity to gain improved efficiency and value for money across your FM spend.
Reducing your FM spend to help mitigate the impact of VAT on school fees isn’t just possible, but should be investigated regardless of the political context.
4 things that you can do now:
1. Audit All Key Assets
2. Conduct A Facilities Management Audit
3. Reclaim VAT On External Services
4. Determine In-House Vs Outsource
Explained below
- Explore and audit all key assets of your school in order to unearth often hidden cost-saving opportunities. ‘Assets’ are everything from the boiler room and heating system, to the catering equipment and fire alarm system.
Be sure to check:
- What assets you have, and assess and detail their condition and age.
- Consider a whole-life approach and align each asset to the overall estates’ strategy. For example, if a school plans to mothball or demolish specific areas of the facilities in 5-10 years’ time, there is no point in investing in those areas.
- Key buildings and areas that are being retained need a Forward Maintenance Register (FMR), that covers the next 5, 10, 15, 20-year period, which identifies the priorities, budget and when the upgrades can happen.
- This will also ensure you spot any issues with how a piece of equipment is working, catch it early and avoid the need for any call outs or equipment breakdowns, which can be costly.
2. A Facilities Management audit and follow-up strategy can lay bare the inefficiencies with new clarity, enabling you to make future decisions for better budget spending.
3. Reclaim VAT back on the external services, something which isn’t currently possible, but is expected to be in the future.
4. Use the audit to determine which services would be better value in-house, and which would be better value outsourced. Some services, such as catering or cleaning, could help relieve a burden.
These are just some examples of many new routes schools may find following an audit.
How to use this opportunity to gain improved efficiency and value for money across your catering spend
5 things that you can do now:
1. Benchmark review and/or tender
2. Cap costs on cost-plus arrangements
3. Track spend and waste
4. Determine In-House Vs Outsource
5. Independent review of in-house operations
Explained below
1. If catering is outsourced, savings are likely to be made either through renegotiation following a best value benchmarking review or by putting your contract out to tender.
2. Cost-plus contracts should not provide a blank cheque to operators. There are several ways of guaranteeing or capping costs and incentivising the contractor to not overspend (which many contracts perversely encourage), but to meet or exceed the budget without compromising on service standards.
3. It’s worth looking at internal hospitality spend which is notoriously uncontrolled and food waste is an expensive problem. There are various tech solutions that enable visibility and tracking of spend and waste and can significantly reduce costs, making them well worth the investment.
4. Taking catering services in-house can be a way to reduce costs, but should only be done following a robust options appraisal. Short-term savings can be quickly eroded without proper management systems, procurement expertise and staff development.
5. If the catering services are already in-house, then it’s advisable to get an independent review of how efficiently you’re operating against best-in-class. It can be easy to become complacent when the catering is in-house and also to lose sight of innovations within the wider sector, fresh ideas and ensuring the service evolves in line with expectations.
FINAL TIP: For schools that choose to run their catering services in-house, consider taking advantage of the latest technology in kitchen management and food procurement to embed a variety of improvements and efficiencies across your catering operation, which can reduce your overall food procurement costs by up to 20%. An added benefit here is that this technology works to unlock essential funds to increase the value within your catering operation and spend on the plate.
Read more about this groundbreaking technology below.
Introducing Litmus Edge - The future of in-house kitchen management and food procurement.
A one-of-a-kind system designed to support schools who make the choice to self-deliver – Edge gives you everything you need to run a successful in-house food service:
- Improved Supplier Management
- Unique Food Safety, Allergen and Compliance Technology
- Streamlined Kitchen Management Processes
- Easy Menu Planning, Pre Order & Payment
Click here to request our brochure to read about the full benefits and features Edge can bring your school.
Need some advice?
Concerned about the upcoming potential VAT increase, and not sure how to prepare for it? Interested in learning more about how you can give your school in-house catering and housekeeping operations the EDGE?
Learn more
We would be delighted to meet up informally to explain further how Edge can support your operation, or help put you on the path to implementing a new Facilities Management strategy.
Contact
Get in touch today with Joe Parfitt, Education Consultancy Director, for a no-obligation chat for more information:
T: 01276 673 880 | E: JoeParfitt@litmuspartnership.co.uk